• Rent crisis - 61 per cent of investors say they’ll sell if changes are made to WA tenancy laws


    Family are in a kitchen eating breakfast together.

    A survey of over 7,000 investors revealed 61 per cent would sell their properties if major changes to Western Australia’s residential tenancy laws are adopted –putting further pressure on the state’s already struggling rental market.

    The survey results are part of an independent analysis by Synergies Economic Consulting into the economic cost of possible reforms to the Residential Tenancies Act (1987).

    Specifically, the analysis focused on two proposals of particular concern:

    1. The proposal to remove the right of a property owner to terminate a tenancy unless done so on prescribed grounds (eg owner wishing to sell or move back in)
    2. The proposal to remove the requirement of a tenant to seek the consent of the property owner to make modifications to the property.

    The Synergies report found that if these proposals were passed into law, it would impose numerous costs on the wider economy and lead to a range of unintended consequences for the WA rental market.

    Among the most notable consequences, the report found WA tenants would pay up to $105 million extra in increased rents each year, while an estimated $142.5 million in higher property management costs would be incurred annually across the rental sector.

    REIWA President Damian Collins said the findings were deeply concerning and highlighted that both tenants and owners would be worse off if the proposals were legislated.

    “Although well intended, these proposals would make renting more difficult and expensive for tenants, while simultaneously stripping investors of their rights and pushing up property management fees.

    "There are fewer than 2,500 properties currently available for rent in Perth and vacancy rates across the state are at or near record lows. Now is not the time to introduce reforms that would further discourage investors from buying in WA,” Mr Collins said

    The independent economic analysis noted that the short-term results could be even worse, as investors react to the changes and either sold existing properties or they stayed out of the market.

    “Mum and dad investors with one or two properties account for more than 90 per cent of all rental owners. Removing an owner’s right to their property – a property they are using to secure their future, will deter people from investing in WA and put extra pressure on the WA Government – and by extension taxpayers - to supply that housing," Mr Collins said.

    Low-income tenants to be most affected

    The Synergies report found that owners and tenants of low-priced properties would be disproportionately affected by the proposed reforms, with low-income tenants expected to face higher rents and experience the greatest difficulty securing housing.

    It is estimated up to $1.3 billion in government funding would be required by the social housing sector to meet the additional demand of the rental market due to reduced investment in the market.

    “WA’s residential tenancy laws are working well for the vast majority of the more than 222,000 rentals currently leased across the state, yet these proposals seek to alter the tenant-owner relationship for all," Mr Collins said.

    We need to encourage investment in WA and focus on addressing the rental shortage. Introducing these proposed reforms will make a bad situation worse and adversely affect the most vulnerable members of our community.

    “We have briefed the WA Government on the report and are pleased they are taking a thoughtful approach to the proposals. We will continue to work with the government to ensure the state's tenancy laws remain fair for all parties.”

    More information

    For more information about the RTA review, visit REIWA's advocacy page